Arckaringa Basin May Hold 95 Billion BOE, LNCGY
Seeking Alpha Analyst Since 2012
I admit, i laughed when i first heard this story. As time passed and the documents circled around, i heard it again, and again...this could be the real deal, an unprecidented organic shale deposit that even at terrible porosity and permeability could be massive in scale and size.
(other articles on Arckaringa 1 2 3 )
Its called the Arckaringa Basin which is an endorheic basin in Australia. Endorheic means it is a closed drainage basin that retains water and allows no outflow to other external bodies of water, such as rivers or oceans, but converges instead into lakes or swamps, permanent or seasonal, that equilibrate through evaporation.
What that means is:
Such a basin may also be referred to as a closed or terminal basin or as an internal drainage system. It is this basin environment that deep below surface has for millions of years collected rich organic material that is now holding a massive amount of Oil.
95 Billion barrels to be exact. It also appears to have all the right stuff to be one, if not perhaps the best shale play on the planet.
The basin is 80,000 square kilometres (31,000 sq mi) in size and is located in South Australia. The basin surrounds the town of Coober Pedy in northern South Australia. link
(It also holds vast geothermal potential, which could help provide cheap power to operate the huge projects coming by 2020 )
LINC Energy owns SAPEX, and SAPEX now controls the largest shale package ever found in Australia. It's still too early to tell, but Linc may now control the single largest shale discovery. 95 Billion Barrels of Oil Equivalent at a 50% Probabality or P50 reserve estimate. This is quite a claim, but the next few years of drilling will either confirm, or not this abundant supply. The time to understand this is right now. By 2020 this will be full steam, and you would not want to look back and missed out on this one.
Boorthanna Formation TOC is generally <0.5% although one sample from Weedina 1 measured 1.8%.
The lower Mt Toondina Formation and upper Stuart Range Formation while immature, have high TOC values
indicating good oil-prone source potential. In Arkeeta 1, all twelve samples from a 200m interval over the
lower Mt Toondina Formation and upper Stuart Range Formation recorded TOC values >2% (up to 7.4%) and HI values >400 (up to 654). The Tmax vs HI cross plot shows that these organic rich shales are Type II source rocks at the threshold of oil generation.
DMITRE's Energy Resources Division has undertaken preliminary work to identify sedimentary packages in
the Arckaringa Basin in a sequence stratigraphic framework, focused on understanding the distribution of the organic rich marine shales (see Menpes, 2012 and Menpes et al, 2012). A preliminary correlation of the Early Permian succession in the Southern Arckaringa troughs and the Boorthanna Trough is postulated (Figure 6); in particular the organic rich marine shales appear to have been deposited in a transgressive system that can be identified in both areas of the basin.
Reservoirs and seals
Sandstone in the Mt Toondina Formation generally exhibits low porosity (6-9%). The Boorthanna Formation contains several thick units of porous and permeable sandstone (log porosity up to 13.5%).
Secondary vugular porosity and minor open parting along stylolites are observed in Cootanoorina Formation carbonate.
Stuart Range Formation and Bulldog Shale (Eromanga Basin) provide regional seals. Intraformational shale and siltstone in the Boorthanna and Mt Toondina formations may locally provide seals.
Traps range from simple domes and faulted anticlines to potential diapiric traps. The presence of tilted fault blocks sealed by inferred massive salt horizons in the Neoproterozoic Adelaide Rift succession are tantalising, given the success of sub-salt rift block plays elsewhere in the world.
There are many papers on the Arckaringa, but the reality is the data looks compelling and the hard science could back up the reserve estimate with a few years of Exploratory drilling.
So who has the best land or acreage so far, has to be SAPEX which is wholly owned by an Australia company called Linc Energy Ltd. They own assets from Poland to Africa, and Alaska to Houston, the jewel in their company may just be the acquisition of SAPEX, who hold the massive shale discovery in the Arckaringa basin.
SAPEX is one of Linc Energy's four operating divisions and is based in Adelaide. It holds all of Linc Energy's petroleum and mineral licences in South Australia, with a total area of 24,600,000 acres in the Arckaringa, Cooper, Eromanga, Walloway and Stansbury Basins.
SAPEX manages all licence tenements and executes the requirements of those licences. Minimum expenditure is a fundamental part of the work programs operating in South Australia.
The SAPEX team is further tasked with unlocking the commercial potential of the resources contained within its acreage.
- See more at: www.lincenergy.com/sapex_shale_oil.php#s....dpuf
Here are just a few slides from Sept 2013 of LNCGY presentation. Later in the year i will add to this company and its plans for now this is all you need to prime yourselves.
The 95.1 Billion Barrels is an estimate but even the pure 20.9 Billion barrels of plain Oil would be a total gamechanger for Australia energy independence.
Linc Energy's oil discovery in Maglia-1 in 2010, and the subsequent geotechnical analysis of organically rich cores recovered from the Arck-1 and Wirrangula Hill-1 wells in 2011, signalled the potential for commercially viable deposits of shale oil.
The Company submitted its internal findings to two independent experts for verification and in January 2013, Linc Energy announced that both had confirmed three formations in the Arckaringa Basin had significant shale oil resource-play potential.
Analysis presented in separately commissioned reports by DeGolyer and MacNaughton (D&M) and Gustavson Associates (Gustavson) indicated the Stuart Range formation and the underlying Boorthanna and Pre-Permian formations are rich in oil and gas-prone kerogen, which may form the basis of a new liquids-rich shale play.
Linc Energy holds a 100% interest in licences and applications covering more than 65,000 contiguous square kilometres (16 million contiguous acres) in the Arckaringa Basin.
D&M estimate total un-risked prospective resources for the Arckaringa Basin at approximately 95 billion barrels of oil equivalent (OTCPK:BBOE).
D&M has applied a probability of geologic success to estimate unconventional prospective resources on a risked basis of 3.5 BBOE at 51% liquids.
Gustavson estimate total un-risked prospective resources for the unconventional reservoirs in the Arckaringa Basin to be 233 BBOE. Gustavson has also conducted a preliminary assessment of resource potential in conventional reservoirs in portions of the Arckaringa Basin, amounting to a further 125 BBOE on an un-risked basis. The estimates on the unconventional reservoirs are encouraging and demonstrate potential for the balance of the Basin to contain conventional hydrocarbon deposits, which suggests additional work on conventional resource potential is justified.
The findings in these reports were consistent with Linc Energy's view that the various formations within the Arckaringa have excellent shale oil resource-play potential with total organic carbon levels, permeability, porosity and thickness comparing favourably to other high-volume unconventional shale oil plays such as the Eagle Ford and Bakken in the United States.
- See more at: www.lincenergy.com/sapex_shale_oil.php#s....dpuf
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.